2020 (5) TMI 364

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.... the Karnataka Value Added Tax Act, 2003 (for short, 'the Act') challenging the order passed by the 3rd respondent- Addl. Commissioner of Commercial Taxes under Section 64(1) of the Act, whereby the order dated 14.5.2015 passed by the first appellate Authority relating to tax period March 2011 is setaside restoring the re-assessment order dated 24.2.2015 passed under Section 39(1) of the Act by the prescribed Authority. 2. The appellant is a partnership firm carrying on the business of sale of timber in the name and style of "Shankar Vijaya Saw mill" in Mundgod. Relating to the tax period in question, re-assessment order was passed by the prescribed authority under Section 39(1) of the Act rejecting the VAT-100 Form filed for the said pe....

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....crepancies noticed. It was argued that the prescribed authority having accepted the accounts ought to have concluded the assessment in terms of the same not on the best judgment. Noticing these factors, the appellate authority has rightly set-aside the addition made by the prescribed authority. The 3rd respondent exceeded its jurisdiction in initiating the suo-moto proceedings much against the provisions of Section 64 of the Act. 5. Learned counsel in support of his arguments has placed reliance on the following judgments: i) STRP No.140/2008, dated 17.3.2009. The State of Karnataka Vs. M/s. N.P. Bharmaiah & Sons. ii) M/s. Jagadeesh Trading Company Vs. The Additional Commissioner (ILR 1998 KAR 949). 6. Smt. K. Vidyav....

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....e business premises of the assessee was conducted by the Enforcement Wing on 24.3.2011 and shortage of suppressed sales was quantified to an amount of Rs. 5,56,892/-. Accepting the same, the assessee firm discharged the tax liability of Rs. 75,180/- and also compounded the offence in a sum of Rs. 7,500/-. 10. At this juncture, it is beneficial to refer to the judgment of the Hon'ble Supreme Court in the case of 32 STC 77 Commissioner of Sales Tax, Madhya Pradesh Vs. H.M. Esufali H.M. Abdulali, wherein it is held that in estimating any escaped turnover, it is inevitable that there is some guess work. The Assessing Authority while making the best judgment assessment, no doubt, should arrive at its conclusion without any bias and on a ratio....

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....eesh Trading Company (supra), the Division Bench of this Court has held in the context of estimation of 5 times the stock difference held to be unwarranted for the reason that the appellate authority has given a cogent and convincing reason for accepting the accounts. As such, where the accounts are acceptable, the assessment has to be made on the basis of the accounts not on the best judgment assessment. 14. In the case of M/s. N.P. Bharmaiah & Sons (supra), the Division Bench of this Court based on the finding of the Tribunal that there was no other material for making the further additions regarding the second sales has upheld the order of the Tribunal. It is not forthcoming whether the said best judgment assessment was made after rej....